The United States (US) tax domestic corporations on their worldwide income. In order to avoid double taxation of foreign source income, US tax rules allow these corporations to credit foreign taxes paid on such income. A domestic corporation's foreign source income, the amount of available foreign tax credits, and therefore its US tax liability, depend in part on the amount and characterization of the distributions it receives from its direct foreign subsidiaries (the same holds if the entity files a US tax return as part of an affiliated group). These direct subsidiaries themselves may have further (indirect) subsidiaries in a tier-like structure. The characterization of distributions made by foreign subsidiaries for both foreign and US tax purposes generally depends on the entities' type (corporation, branch or partnership), on the ownership relationships between them, and/or on the types of income they earn (e.g., interest income versus income from sales of goods and services). For complex entity structures involving a large number of entities of several types over multiple tiers and earning several types of income, determining the individual entities' as well as the corporate group's overall tax liability for a given distribution strategy and determining the best such strategy from a tax perspective is usually very cumbersome.